US President Barack Obama (right) is interviewed by Zimbabwean entrepreneur Takunda Ralph Michael Chingonzo, during the US-Africa Business Forum in Washington on Tuesday, which was part of the three-day US-Africa Leaders Summit. Photo: Reuters

Washington - Africa’s fast-growing economies represent a great opportunity for US companies to expand their investments as long as governments curb corruption and human rights abuses, according to US President Barack Obama.

“Even as Africa continues to face enormous challenges, even as too many Africans still endure poverty and conflict, hunger and disease, even as we work together to meet those challenges, we cannot lose sight of the new Africa that’s emerging,” he said at the US-Africa Business Forum in Washington on Tuesday.

Obama highlighted $33 billion (R353bn) in commitments to Africa: $14bn in investments by firms including General Electric and Coca Cola, $7bn in financing to promote US exports and $12bn for an initiative to double availability of electricity in sub-Saharan Africa.

He is seeking to shift the US focus in Africa toward fostering investment and trade, instead of the traditional emphasis on providing aid. Tuesday’s forum, which included more than 90 US companies, was part of a three-day summit, which concluded yesterday, with more than 40 African leaders.

To draw more US investment, the administration is pressing the African leaders to protect human rights, especially for women, curb corruption and implement more transparent financial systems.

“Capital is one thing,” Obama said. “Rule of law, regulatory reform, good governance? Those things matter even more” because investors want to be able to do business without “paying a bribe or hiring somebody’s cousin”.

Africa’s biggest need, he said, was “laws and regulations and structure that empower the individual” and do not simply preserve “power for those at the very top”.

The administration is seeking more robust commercial ties in Africa to tap some of the fastest-growing economies.

The International Monetary Fund estimated sub-Saharan Africa’s growth at 5.4 percent this year and 5.8 percent next year, compared with 1.7 percent and 3 percent in the US for the same two years.

The world’s largest economy faces competition. China has overtaken the US as Africa’s biggest trading partner with a relationship that exceeded $200bn last year, more than double that of the US.

China’s state-owned enterprises have rolled out projects in every country on the continent, including hydroelectric dams, highways and rail lines linked to the extraction of natural resources.

“The US is determined to be a partner in Africa’s success,” Obama said. “We don’t simply want to extract minerals from the ground for our growth,” he added, drawing an indirect contrast to China’s approach.

The administration’s strategy leans heavily on companies investing in Africa, which Obama said would increase employment in the US as well.

General Electric announced plans earlier this week to invest $2bn in the region by 2018 and double its workforce on the continent.

Ford is looking to expand its car manufacturing in Africa.

“Everything is pointing toward a surge in the African economy,” Jim Benintende, Ford’s head of operations in the Middle East and Africa, said.

Energy shortages remain an obstacle. About 70 percent of the population lacks electricity, according to the International Energy Agency.

The Obama administration has proposed a five-year programme dubbed Power Africa. The $7bn plan to double access to power in Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania still requires action by Congress.

Private equity firm Blackstone Group is in a $5bn partnership with Aliko Dangote, the president of Dangote Group and Africa’s richest man, for power projects in sub-Saharan Africa.

Carlyle Group is also investing an unspecified amount with Dangote in Nigerian oil and gas ventures and other projects in sub-Saharan Africa.

The US would add 10 trade missions and expand its presence in other parts of Africa, Commerce Secretary Penny Pritzker said. – Bloomberg